Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the Indian financial system remains “completely” insulated from the recent crises in the US and Switzerland. He reiterated that the country’s banking system is resilient, stable and healthy. Governor Das was speaking at a press conference in Washington, where he is attending the spring meeting of the International Monetary Fund and the World Bank, along with Finance Minister Nirmala Sitharaman.
While asserting the importance of financial and banking sector stability amid the developments in the US and Switzerland, the Governor said that the banking failures have renewed a lot of interest.
Responding to a question on the collapse of the Silicon Valley Bank, Governor Das said, "So far as India is concerned, the Indian banking system, the Indian financial system, remains completely insulated from the developments that have taken place in the US or in Switzerland. Our banking system is resilient, stable and healthy.”
He added, “The parameters related to banking, whether it is capital adequacy, or it is the percentage of stressed assets or it is the liquidity coverage ratio of individual banks both at individual level as well as at the systemic level or issues like provision coverage ratio, aspects like net interest margin of banks, profitability of banks, whichever parameter you take into consideration, the Indian banking system continues to be very healthy.”
As far as the RBI is concerned, said Governor Das, they have significantly improved and tightened their regulation and supervision of the entire banking system, including the non-banking financial companies.
The focus of supervision is on early identification of any buildup of vulnerabilities and not waiting for the crisis to build up, the RBI governor said.